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Al Baraka Banking Group net income up 11 per cent to $235 million

Bahrain-based Islamic banking group, Al Baraka Banking Group (ABG) achieved a net income of $235 million in 2012, a noticeable increase of 11 per cent on the income achieved in 2011.

Total assets increased by 11 per cent, total financing and investments by 21 per cent, deposits including equity of investment account-holders by 12 per cent and total equity be nine per cent at the end of December 2012 in comparison with the end of December 2011.

The financial statements of the group for 2012 showed that the continued expansion in business reflected positively on income, with total operating income of $880 million in 2012, an increase of 21 per cent over 2011. After deducting all operating expenses, net operating income reached $422 million in year 2012, which represents an increase of 23 per cent compared to the net operating income of 2011. Net income attributable to the parent’s shareholders reached $133 million compared to $118 million during 2011, which represent an increase of 13 per cent.

ABG’s total assets amounted to $19 billion as at the end of December 2012, an increase of 11 per cent over the comparative figure as at the end of 2011. Operating assets (financing and investments) amounted to $14.3 billion as at the end of December 2012 compared to $11.8 billion at the end of December 2011, a substantial increase of 21 per cent, reflecting the expansion in the group's banking businesses during 2012. Customer deposits and equity of investment account-holders have witnessed a good increase of 12 per cent from $14.7 billion at the end of December 2011 to $16.4 billion at the end of December 2012, which indicates continued customer confidence and loyalty in the group and growing customer base and expansion in the branch network. Total equity reached around $2 billion at the end of 2012, an increase of 9 per cent.

Q4 2012 net income amounted to $52 million, compared to $46 million for the same period of last year, an increase of 12 per cent. Net operating income increased to $112 million in the fourth quarter of 2012 compared to $92 million for the same period of last year, an increase of 21 per cent. Net income attributable to the parent’s shareholders for the fourth quarter of 2012 reached $26 million compared to $21 million during 2011, which represent an increase of 24 per cent.

H.E. Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said, "The negative economic developments, especially in the Euro zone continued during 2012, and political and social changes witnessed by a number of Arab countries have not been settled as yet. It is natural that the operations of banks were affected by these developments, but we nevertheless note with satisfaction that ABG continued to achieve good results, which reflects the group successful in following precautionary strategies that enabled it to deal wisely with these developments and to continue expanding its business, and at the same time continue its geographic expansion programs and building branch network. This was not possible without the strong financial means, human resources and technical capabilities possessed by the group, as well as its commitment to the Islamic banking model that impose the hard work for the reconstruction of the societies and serve the communities in which it operates."

Abdulla Ammar Al Saudi, Vice Chairman of ABG, said, "The financial and operational results achieved in 2012 reflect the keenness of the group to grow steadily and efficiently, despite growing regional and global challenges around us, and growing regulatory, technical and human requirements. We were able to keep pace with all these challenges and requirements, committed to the highest professional and ethical values and principles, on the basis of the new identity of the group that launched. The group, through these values and principles, was success in the implementation of strategies and programs that were applied under the supervision of the Board of Directors of the group."

Adnan Ahmed Yousif, Member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group said, “the good results that we achieved during 2012 highlight once more our determination to continue to invest our substantial financial resources and expertise and the wide geographic network of the subsidiary units of the group in maximising the returns to our shareholders and the investors in the group by implementing business strategies based on improving the quality of our products and services, offering more innovative products, expanding the branch network of the group subsidiary units, strengthening the relationship with our partners, investors and customers and entering new markets, as well as modernising and developing the human, operational, regulatory and technical infrastructures at the group and subsidiary banking units levels.

“The subsidiary units of the group in Turkey, Algeria, Egypt, Jordan, Pakistan and South Africa continued their expansion by opening new branches in 2012, where new branches reached 26 branches. This has direct positive impact on growing their deposit base and financing portfolios. Total branches of our units in 15 countries increased 424 branches in 2012. We expect that total branches of the group’s units will exceed 500 branches during the coming three years.

“In the context of the strategy of Al Baraka Banking Group to the development and revitalisation of the economies of countries where it operates through its banking units, Al Baraka Bank Egypt signed the first Islamic partnership contract to finance small projects with the Social Fund through the World Bank in order to finance new and existing small projects though Islamic partnership. The total amount of the contract is EGP 200 million, divided equally between the Social Fund for Development through funding from the World Bank and Al Baraka Bank Egypt.

“We are very glad also that Al Baraka Bank Limited – South Africa (ABL) has been granted permission to deal in foreign exchange under the Foreign Exchange Control Law of South Africa. As an authorised dealer in foreign exchange, ABL will now be able to open nostro accounts in foreign currencies, facilitate inward and outward remittances, send and receive letters of credit and documentary collections and provide all other related services. This major achievement provides an excellent opportunity for ABL and other ABG Units to enhance their cooperation in trade finance and we invite clients to take full advantage of this important development.

“We also continued during the past year modernising the institutional, human and technical infrastructure of the group through developing the regulations, applications and practices of corporate governance, risk management social responsibility, governance, compliance, AML, training and risk management regulations in according with latest international standards.The President & Chief Executive of the group added that, "In accordance with our new strategy, we have many plans and initiatives that we intend to implement during 2013. These will include launching new innovative products and services in the markets, especially in Maghreb countries, enhancing the unified culture related to the group's corporate identity, increasing the inter-business among the group's units as well as enhancing the standing of ABG in the international markets. All of these plans will be implemented, God willing, successfully considering that we are the only Islamic banking group that has such diversity of geographical presence and excellent knowledge of the markets."

Al Baraka Banking Group is a Bahrain Joint Stock Company Licensed as an Islamic Wholesale Bank by Central Bank of Bahrain, listed on Bahrain Bourse and NASDAQ Dubai stock exchanges. The authorised capital of Al Baraka is US$1.5 billion, while total equity amounts to about $2 billion.

ABG has a wide geographical presence in the form of subsidiary banking Units and representative offices in fifteen countries, which in turn provide their services through more than 424 branches. Al Baraka is currently having a strong presence in Jordan, Tunisia, Sudan, Turkey, Bahrain, Egypt, Algeria, Pakistan, South Africa, Lebanon, Syria, Indonesia, Libya, Iraq and Saudi Arabia.

Islamic Chamber of Commerce and Industry - الغرفة الأسلامية للتجارة و الصناعة
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